Surging U.S. natural gas supplies not only are increasing employment in the energy patch, but the boom has opened the door to prospects in the methane mitigation business, according to the Environmental Defense Fund (EDF).
The methane mitigation industry is supporting economic development in key energy regions of the country, based on an EDF-sponsored report by Datu Research. As the federal government considers standards to limit methane emissions from oil and gas operations, the demand for mitigation equipment and services is expected to increase.
"The Emerging U.S. Methane Mitigation Industry" assesses the current market landscape for companies providing solutions to reduce methane emissions from oil and gas operations. Seventy-six companies nationwide, more than half small businesses, were found to manufacture methane controls or offer related services from more than 500 different locations in 46 states, EDF Chief Counsel Mark Brownstein said during a conference call on Thursday.
The research "clearly shows an industry that has the capability to help reduce methane emissions and, with the right policies in place, also has the room to grow," he said. "These companies offer opportunities for the oil and gas industry to increase operational efficiencies, improve public and worker safety and reduce air and methane pollution.
"It's a win-win proposition made even better, when you consider that this industry can support more good-paying U.S. jobs that largely can’t be outsourced."
Ten states, led by Texas with 16 headquartered in Houston, "is the clear leader." Other states with facilities, in descending order, are Oklahoma, Colorado, Pennsylvania, Louisiana, California, Wyoming, Illinois, Ohio and New Mexico. "These states stand to gain the most from future growth associated with this industry." There are 344 methane mitigation service companies, 102 manufacturing/assembly facilities and 54 sales companies, according to the research.
"Demand is likely to increase with natural gas production," said Datu President Marcy Lowe. "These are highly skilled jobs with good pay and they are not likely to be outsourced."
According to the research, many of the methane mitigation companies have developed effective technologies and services to capture unburned natural gas. The services "create new, well-paying American jobs for skilled workers, save industry over $1 billion in lost product and reduce air pollution. The burgeoning industry is also helping to revitalize manufacturing in states such as Texas, Oklahoma and Pennsylvania."
Earlier this week the U.S. Environmental Protection Agency (EPA) reported that in 2013, oil and gas systems represented the second largest source of greenhouse gas emissions in the United States, second to power plants (see Daily GPI, Sept. 30). However, methane emissions fell 1% year/year because of an increase in gas drilling.
EPA is expected to release a methane emissions strategy soon for gas and oil pipelines that may include regulatory and/or voluntary steps (see Daily GPI, Sept. 4). Producers have taken notice. Last month Houston's Southwestern Energy Co. joined a group of international oil companies in a commitment to slash methane emissions as part of a project by the United Nations (see Daily GPI, Sept. 23).
A methane mitigation program to advance technology strategies was implemented by EDF and several producers in Colorado (see Daily GPI, Aug. 21). Colorado also has adopted the nation's first air pollution rules that require oil and gas companies to control both emissions of methane and volatile organic compounds (VOC). The rules, supported by energy companies and environmentalists, are designed to reduce nearly 200,000 tons of methane and VOCs each year.